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Politics : The Obama - Clinton Disaster
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To: pompsander who wrote (12209)5/5/2009 7:44:35 PM
From: DuckTapeSunroof   of 103300
 
Re: "a situation where the white hats and the black hats have to stand up...."

Not too many will keep paying their legal talent all that high-dollar hourly for very long.

As I understand it, US bankruptcy law (with regard to corporate chapter 11 situations such as this, where the paramount goal of the reorganization is to emerge out the other end with a *viable ongoing commercial enterprise*... not a complete liquidation), specifically allows for a two thirds or greater concurrence of creditors to 'cram down' various modifications of the - otherwise inviolate - normal hierarchy of debt priorities.

With the court's agreement, of course.

So, since the one side ALREADY seems to have more then 70% of all the creditors votes (with more every day as the article pointed out... they may have 80% or 90% by the morning), AND they have a well-heeled party (Uncle Sammy) willing to take up the bankruptcy role of "debtor-in-possession" and inject the needed NEW FUNDING required to permit the company to continue in business until the bankruptcy reorganization is over with --- while the *other side* (the few remaining 'Vulture Capital' funds who still hold some 10% or perhaps 15% of the debt) are completely committed to not investing a single cent more of cash into helping the bankruptcy court reorganize the business....

I expect the die-hard bond gamblers to fold their tents fairly quickly... (especially if the Judge continues to school them. :-) Probably most of these funds bought their debt in the secondary market at (what they thought was...) fire sale prices over the past year or so, hoping to score big. (Likely none of that money went to Chrysler anyway because it was not a primary offering.)

And --- as a couple of articles have suggested... this may all be a training run for the bigger GM bankruptcy to come along in about a month or so.

(Prudent and wise, I think, to have a trial run first before the big show....)
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